The main benefits obtained from the implementation of this structure are fewer employee-employees and employee-employers conflicts increased productivity, and performance. As the largest coffeehouse chain in the world, the company maintains its industry leadership partly through the appropriateness of its corporate structure. In the functional structure part of Starbucks organizational structure, Starbucks has different groups of employees taking care of different functions. First, the geographic divisions make it possible for the firm to meet the specialized needs of different customers in different countries. Lee, J. Y., Kozlenkova, I. V., & Palmatier, R. W. (2015). Structural marketing: Using organizational structure to achieve marketing objectives. For example, the coffee chain offers stock options and health … Starbucks organizational structure plays a big role in its products’ development and innovation. A lack of co-ordination amongst them can be harmful to the firm as one would not know what the other is up to and what the other needs. Valuing employees and their contribution. They might start threatening the central control too, if there exists a conflict between the divisions and central control. The major part of Starbucks’ success depends upon Starbucks organizational structure. If you want to learn more about organizational structure types in Project Management you should check out our 100% Online and Self-Paced Project Management Professional Certification Training . At Starbucks the Formal Group has a formal organizational structure and involves a flat structure that is Board of Directors, Managers and staff. Learn how your comment data is processed. When Howard Schultz resumed the CEO position in 2008, he changed Starbucks Coffee’s corporate structure to bring focus back onto customer experience. ... For a more immediate example, take a multinational organization like Starbucks. Types of Organization Structure are: Functional: Likewise, normally called a bureaucratic authoritative structure, the utilitarian structure partitions the organization in view of strength. Also, different levels of the organization are responsible for maintaining the integrity of the corporate structure. This type of understanding in organizational cultural behavior promotes achievement and consistency for Starbucks. Structure of Organization; Advantages of Functional Organizational Structure. Starbucks has a matrix organizational structure, which is a hybrid mixture of different features from the basic types of organizational structure. Claver-Cortes, E., Pertusa-Ortega, E. M., & Molina-Azorín, J. F. (2012). Save my name, email, and website in this browser for the next time I comment. Starbucks’s corporate culture influences how such team effectiveness is achieved. This duplication of authority can be harmful and confusing for employees. For example, the company has an HR department, a finance department and a marketing department. Product based divisional structure is also a part of Starbucks organizational structure. For example, the company’s product-based divisions intersect with functional groups and geographic divisions, which in turn intersect with other parts of the organization. The company recognizes the importance of strategic alignment involving various facets of the business. For example, in each café, the company has teams organized to deliver goods and service to customers. Corporate structure, ownership and the likelihood of innovation. Csaszar, F. A. The functional divisions make the working smoother, faster and reliable, as specialists people are doing the jobs, and the chances of them making errors are minimal. These competitive advantages are essential in interacting with the industry environment, which involves the strong force of competition shown in the Porter’s Five Forces analysis of Starbucks Corporation . Liao, C., Chuang, S. H., & To, P. L. (2011). Learn about Starbucks Mission and Vision Statements. At the cafés, baristas clearly communicate with each other to fulfill orders. Organizational Structure of Starbucks Starbucks uses a mechanistic structure as a contemporary design Starbucks Organizational Culture and Environment Starbucks Corporation is considered as one of the leading coffee house chains that offer best quality coffee to its customers. President of Europe, Middle East, and Africa Operations) and the functional head (e.g. New regional divisions were created and teams at the company’s cafés were given better training. Selecting Corporate Structure for Diversified Firms. Team structure is mostly followed on the lower levels of the organization, for example in the café’s cooking and delivery systems. The corporate culture of Starbucks encourages collaborative efforts through effective communication. Enter your email address below to subscribe to my newsletter. However, the ones enumerated above are the most significant in shaping strategic management decisions in the business. Finally, the matrix structure allows the firm to utilize its human resources efficiently by hiring them for more than one tasks. The end results of employing the mechanistic organizational structure has made Starbucks's to produce high quality and standardized goods and services ad also enhanced excellent customer services and enhanced communication both internally and externally. Followed at the top hierarchy of the financial performance of franchised locations and company-owned coffeehouses: What them. 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